[mrfumier]

"And you don't extract profits from a rail line by offering the best service."

So how do you extract profits then?

[mnd999]

Minimise investment to maximise profits, which you take, whilst running the minimum service required to avoid contract penalties or publicity so adverse you lose your contract. Then threaten to go bust and get bailed out by the government when the infrastructure starts to break a few years later.

At least that’s they playbook they’re all using.

[veltas]

The infrastructure isn't privatised though, it's maintained by Network Rail.

[ukoki]

>avoid contract penalties

I expect the maximum profit sweet spot actually includes a small amount of penalties. If you don't get any penalties at all, you are probably leaving money on the table re service cuts.

[juujian]

By running your lines on a shoestring budget, how else would you? The contacts have a fixed life time, keep your expenditures low and you can extract the highest profits. Long-term maintenance in particular suffers after privatization, because why would you, that doesn't align with your goals. And the risk is nill, because the government needs to provide the services so if things go awry you have little too worry about. They will have to bail the line out. Just find a way to move money from the entity to shareholders while you can and you're good, they are not clawing that back.

[giaour]

Offering shitty, expensive service. It's not like customers can use a competing rail line, so every dollar you invest in customer service is a dollar out of your pocket.

[dffdsa432]

The USA's rail lines are privatized and they're anything but "shitty" and "expensive" considering they're lower cost than trucking.

[timmb]

By stripping and selling off as many assets as you can and borrowing as much as possible leveraged on the income from future fares. There is no incentive to spend this on long term investment or contingency planning. The railways are an essential service so the government will always have to step in when the private company reaches breaking point, so no money is saved by the state in the end. It’s just disguised debt with terrible interest rates.

[dffdsa432]

Amtrak, a public rail company gets over a $1 billion in public funding. Private rail lines do not. Amtrak has operated at a loss for decades unlike private rails.

[oaw-bct-ar-bamf]

1.) Force other competitors to go belly-up or buy them to create a Monopoy or if the authorities don‘t let you do that, try to end up in a duopoly situation where you and your competitor come to some silent agreement to not overly compete.

2.) Raise the regulatory bar to prevent startups from entering your field.

Milk whatever half dead infrastructure you have and people depend on.

Oh and raise prices every odd year while still not investing in the rotten infrastructure. Somehow investors need to see growth and dividend payments.

Due to 1.) there is no competitor left that could offer a better service. People cannot simply switch.

Die to 2.) you are not in danger of ever having to face situation 1.) again.

Job of the government is to not let 1. and 2. happen.

[jleask]

Cutting corners and costs e.g. shutting ticket offices, doing just enough to barely offer the service. It's not like your passengers have any sensible alternative. If that doesn't do it then you can also load the company up with debt and pay yourself a nice dividend until rates rise.

[danuker]

> load the company up with debt and pay yourself a nice dividend

I am new to this. Doesn't a dividend come from profits? What profits are there if you need debt? And who will loan to you if your business plan is to exit scam?

[iso1631]

> shutting ticket offices

Why should I pay higher prices/taxes to keep ticket offices 90% of the country and increasing don't use open?

International Airlines finished moving to e-ticketing 15 years ago

[solardev]

Sounds like Amtrak... the zombie of a train service, constantly revived by new cash injections from Congress whenever it does poorly (which is always)

[hsjqllzlfkf]

Cut costs. And if youre in a monopoly position, you can in addition prices.

I mean, do you really not understand how earnings are calculated, or are you trolling?

[mrfumier]

I don't understand. If it's a monopoly, it's not a free market, by definition. Seems like you are the one trolling here.

[notahacker]

By raising the prices of your local monopoly to the yield-maximizing level whilst cutting overheads as much as possible.

[ModernMech]

By making sure there’s no water fountains on the train platforms, yet plenty of kiosks and vending machines that sell water.

I was just at EWR last night waiting for an arrival and there was an old man looking for water. He asks an employee where to find some and she looks at him like he has two heads.

“You have to buy some. Or you can drink out of the faucet in the restroom”

Can you imagine that? Telling an old man at 1am he has to drink out of a bathroom fixture to quench his thirst.

In my mind, I was hoping he was flying to a more civilized country. Because that’s the system we’ve built for ourselves. In a better present, the man would have access to a drink for free. But because a profit needs to be made, the entire airport is organized around little nickel and dime scams.

[drsnow]

This is the way the world works now and anyone who disputes the justification of it just gets neatly added to the pile of "complaints" burned by elites for warmth.

[edf13]

By cost-cutting and offering the bare minimal of service...

Especially when the service is a necessity for many (Train to work, water to drink, electricity to keep warm and cook, etc).

[iamacyborg]

Extracting short term profit isn’t hard, and that’s all these investment funds that operate on short time scales are looking to do.

There was an excellent book on the subject published this year called Our Lives in their Portfolios[^1].

[^1]: https://www.ft.com/content/7da72f9c-978b-41e7-8e4b-478818f74...

[katbyte]

Deferring maintenance, focusing on how to make the most per dollar spent, making your workers lives terrible, ignoring safety.

Here is how that works in American railways: https://m.youtube.com/watch?v=jNkYNjADoZg

And why they are on a road in implosion.

[jahnu]

By competing to make the best rolling stock, online booking systems, catering, cleaning services, etc. These contracts should be put out to tender and should the promised level of service not be delivered then contracts should be lost and/penalties applied where necessary.

Most important is that the target service coverage, quality, etc should be decided by government (who should be seeking to please voters), not corporations who are seeking to please shareholders.

[lostlogin]

Sell off assets, get subsidies, understaff, rundown and don’t maintain equipment. Provide a shit service. When bankruptcy comes up you’ll be bailed out.

[jacknews]

Just like all PE; take on huge debts ostensibly to fund expansion, efficiency, etc, and then ... give the loaned cash to shareholders.

[waldothedog]

Minimizing costs and competition?

[BiteCode_dev]

You milk the captive market.

[aloisdg]

You don't.

[wodenokoto]

Rail lines have inherent competition in form of trucks and boats (for transport of goods) and cars, busses and planes (for transport of people) and rail is often outcompeted by these as they don’t require large station in expensive real estate.

So the example of rail doesn’t really apply to this branch of the discussion.

However, once you’ve bought a house, it is very difficult to to but in new pipes from a different water works.